Nov 25, 2019
Tether has fleetingly grown amidst cryptocurrency market crisis. With volumes above $31 billion, USDT is now a member of the big 4, along with pioneer cryptocurrency Bitcoin, Ethereum and Ripple.
Now being the fourth largest cryptocurrency by market cap, USDT increased its value throughout the weekend, along with other stablecoins making their way higher in demand. The main reason Tether skyrocketed so high in 2019 was the supply expansion, with an estimate of 2 billion in coins circulating the market in the beginning of the year. Nobody knows the real reason of its sudden jump, although industry veterans argue the company is printing new USDT intentionally. Tether denies such allegations, explaining the growing demand is organic, and USDT is the ultimate tool to add market liquidity.
The world’s largest stablecoin filed a motion with the US District Court in New York’s Southern District to dismiss any outstanding lawsuits. With this move, the company aims to clean its name form frivolous lawsuits, many of which don’t have the required legal basis and hence should be dismissed. The lawsuit’s main basis was focused on Tether’s parent company – iFinex, manipulating the crypto market. In an official statement, Tether Inc. stated:
“As we predicted last month, mercenary lawyers continue to try to use Tether to obtain a payday. To be clear, there will be no nuisance settlements or settlements of any kind reached. Instead, all claims raised across both actions will be vigorously contested and ultimately disposed of in due course”
Adam Kurtz and Eric Young filed a new class-action suit, accusing Bitfinex and Tether of “monopolizing and conspiring to monopolize the Bitcoin market”, while manipulating data or making inaccurate claims. Despite filing for a dismissal, the New York case is still ongoing.
Tether and Bitfinex have been allegedly causing prices of Bitcoin to be artificial during the Class Period:
“Defendants’ control of USD₮ issuances and Bitfinex permitted Defendants and their co-conspirators to coordinate purchases and sales with rising and falling Bitcoin prices. When Bitcoin prices were falling, Defendants and their co-conspirators printed USD₮s and artificially increased the price of Bitcoin. Once Defendants and their co-conspirators artificially inflated the price of Bitcoin, Defendants and their co-conspirators then converted the Bitcoin back into USD₮s to replenish Tether’s reserves.”
Amidst the scandal and the market crisis, Binance reports about 40% of institutional investors go for Tether (USDT) as their main choice of stablecoin. 19% of the survey respondents claimed they use USD Coin (USC), and about 13% of interviewers claim they use TrueUSD (TUSD) and Paxos Standard (PAX). Other mentioned coins are DAI, BUSD, Gemini USD and USDS.
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